Semiconductors

After Friday's share price rise (Strait of Hormuz open), we see Infineon and STMicro's upside completely exhausted.

Although 50% of Infineon and 40% of revenue for STMicro still comes from the Automotive market, they have been riding the AI wave as they have some adjacency products like Transceivers and Power semiconductors for the AI supercycle.

Automotive market indications from China have not been very positive with BYD also struggling. Most recent TSMC data also revealed an -11% decline in automotive revenue which gives us a signal that Q2 could also not see much growth.

From an upside perspective, we see NXP as better placed than the other two as in the last quarter, NXP saw good growth in Industrial division. Also, the company has been regularly commenting on its progress toward its financial targets.

At current price levels, NXP should be a good bet, while Infineon and STM should be approached with a wait-and-see attitude for now.




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